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Dimensions of Knowledge Value Assessment

Measure Applied Knowledge

Continuing studies1 affirm that the relationship between knowledge sharing and innovation continues to grow. To help measure knowledge growth the Enterprise Knowledge Graph (EKG) Maturity Model provides a single metric for an entire Enterprise’s utilization. To qualitatively identify maturity trends the Model is structured with Pillars. To quantitatively measure maturity success the Model supports the use of dimension-specific data points. Additionally, to help explain the investment created at "Maturity" the dimensions may be used to formulate Business Value metrics.
To assess value, many in the investment community use Economic Value Added (EVA) and Value Based Management (VBM).
EVA, also known as economic profit, aims to measure the True Value that a firm creates through its operation. VBM is a framework that is focused on having the EVA being a sustainable value. Often the first VBM step is determining the variations of a dimension that correctly measure that value.

Value To Be Measured

Value analysts often use data science methods and computational art mechanisms to correctly measure dimensions. Especially, when algorithmic parameters must be used to convert Business Value dimensions into Key Performance Indicators. Moreso, when the complexity of the innovation2 requires a dimension scope supporting the objectives of Sustainability; Innovation Strategy; Portfolio Management; Project Management; Technology Management and Knowledge Management. Such as:

Sustainability

For Sustainability to be maintained at a certain rate or level, the objective would likely include all forms of Business Value that indicate the health and well-being of an enterprise. The most likely core objective would be to have a Value Proposition that gives the customer the reason to choose their offering. Another likely objective would be the Value Stream Management focused on the flow of Value Chain activities performed when validating a product-market proposition.

Innovation Strategy

Innovation Strategy often has an objective to have unique products that differ significantly from those of competitors. When Differentiation Innovation is an objective the USP (Unique Selling Point) would provide a clear Value Proposition. There may also be Strategic Decision to introduce a Value Innovation objective of having Differentiation at Lower Cost. Which may be measured via Expected Monetary Value (EMV) Analysis that compares cost, e.g. design, marketing, packaging, to product revenue.

Portfolio Management of Value

Portfolio Management of Value may be based on the objective that innovation resources are only invested in assets that deliver true value.

True Value

Statistically, True Value is obtained with perfect measuring instruments (without committing any error of any type) both in collecting the primary data and in carrying out mathematical operations.

Computationally, Return On Investment may be calculated by subtracting the amount invested from the asset value; Total Portfolio Valuation may be based on the value of all assets owned. Which in turn may use Benefits realization management (BRM) techniques to identify the True Value of an asset.

Project Management

Project Management can be considered a success if it delivers on an objective that has a predetermined Business Value. That determination may use Value Stream mapping to create a visual guide of the changes necessary for that delivery. Additionally, Project Value may be expressed using Business Case rationale that evaluates the benefit, cost and risk of alternatives. Stakeholder Value may also be recognized for those with tangible objectives. Such as, performs better; is easier or more convenient to use; is more reliable; is more durable; is more available to more customers.

Technology Management

Technology Management is recognized as a Value Driver when it enhances Business Capabilities that add profitability, reduce risk, and promote asset growth. For instance, Technology may be treated as a Value Driver when it is used to transform data into an economic asset. As in, the resulting "Data Asset" is used to improve operations, increase revenue, solidify relationships with stakeholders, produce new revenue streams, improve the quality of current products, establish competitive differentiation, allow innovation, and reduce risks.

Knowledge Management

Knowledge Management (KM) has historically been defined as the structured development, transfer, dissemination and application of knowledge. More forward-looking thinking, Paoloni c.s.3 has KM being key to innovation and is a component of entrepreneurial capital or intellectual capital. Moreover, Indra Abeysekera4 identified that KM and Intellectual Capital have become inseparable partners in enterprise value creation. Especially when Knowledge Value Chain tasks result in embedded knowledge products / services that have a unique competitive advantage or social benefit. That outcome may be also feature in a Value Driver Tree (also known as KPI Tree) that links the Business Values to the Drivers (e.g. embed into service) to help identify those which have the greatest impact on total value

Next Steps

As concluded in a knowledge metrics survey by Matošková5, it seems sensible to employ Knowledge as an Asset measurement that enhance Intellectual Capital objectivity and Value Creation transparency. Such as, create a Use Case Tree for Intellectual Capital measurement that may include - Knowledge Graph Identifier; Stakeholder Awareness : System Measure : Output Measure : Outcome Measure : Economic Asset Measure .

References

  1. Knowledge Sharing and Innovation: Systematic Review; Delio Ignacio Castaneda and Sergio Cuellar Pontificia Universidad Javeriana, Bogota, Colombia ↩

  2. Key Performance Indicators and Dimensions for the Innovation Process, 25th Innovation and Product Development Management Conference, Porto, June 10-13, 2018; Vanessa Nappi, Kevin Kelly ↩

  3. Knowledge management, intellectual capital and entrepreneurship: a structured literature review;Journal of knowledge management Paoloni, Mauro Coluccia, Daniela Fontana, Stefano Solimene, Silvia ↩

  4. Intellectual Capital and Knowledge Management Research towards Value Creation. From the Past to the Future; Journal of Risk and Financial Management; Indra Abeysekera ↩

  5. Measuring Knowledge. Journal of Competitiveness. Matošková, J. (2016) ↩

Author: Carl Mattocks

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